Transparency of Image Empties not working
With no transparency level set, and all transparency options enabled (for all objects), blender defaults to complete transparency of all objects except the one selected, and behaves similar to x-ray.

To achieve the kind of transparency you'd like, follow these 2 steps:

1) Set a transparency level in properties> data (here I've set both images to 0.35).



2) Enable transparency in properties> object.